41. Notes to the cash flow statement
In accordance with IAS 7 (Statement of Cash Flows), the consolidated cash flow statement describes changes in the group’s cash and cash equivalents through cash inflows and outflows during the reporting period.
The item cash and cash equivalents includes cheques and cash on hand as well as cash in transit and bank deposits with a remaining term of up to 3 months.
The cash flow statement distinguishes between changes in cash levels from operating, investing and financing activities. Cash flows from discontinued operations are reported separately where they concern discontinued business operations.
During the reporting period, cash flows from operating activities amounted to €1,027 million (2015/16: €1,173 million). Depreciation/amortisation/impairment losses are attributable to property, plant and equipment at €643 million (2015/16: €605 million), other intangible assets at €89 million (2015/16: €88 million), goodwill at €19 million (2015/16: €0 million) and investment properties at €11 million (2015/16: €16 million). This is contrasted by reversals of impairment losses in the amount of €3 million (2015/16: €11 million).
The change in net working capital amounts to €–44 million (2015/16: €–77 million) and includes changes in inventories, trade receivables and receivables due from suppliers, included in the item “other financial and non-financial assets”. Furthermore, it includes changes in trade liabilities.
Other operating activities resulted in a total cash outflow of €65 million (2015/16: cash outflow of €368 million). This item includes changes in other assets and liabilities as well as deferred income and prepaid expenses. In addition, it includes changes in the assets and liabilities held for sale, adjustments of unrealised currency effects and the elimination of deconsolidation results recognised in EBIT.
The most important item is the reclassification of deconsolidation earnings under EBIT into disposals of subsidiaries. These relate to the deconsolidation of 2 Chinese property companies and real Hyper Magazine in a total amount of €35 million.
In 2015/16, “other” items included the reclassification of the deconsolidation earnings from the sale of the wholesale activities of METRO Cash & Carry in Vietnam amounting to €451 million.
In the reporting period, investing activities led to cash outflow in the amount of €601 million (2015/16: cash inflow of €512 million).
The acquisitions of subsidiaries mainly relate to the acquisition of Pro à Pro (2015/16: mainly Rungis Express). The divestments include outgoing cash from the disposals of subsidiaries Real Hyper Magazine and the 2 Chinese property companies. In the previous year, this included net payments from the disposal of METRO Cash & Carry’s wholesale business in Vietnam in the amount of €357 million.
The amount of investments in property, plant and equipment shown as cash outflows differs from the additions shown in the asset reconciliation in the amount of non-cash transactions. These essentially concern additions from finance leases, currency effects and changes in liabilities from the acquisition of miscellaneous other assets.
The financial investments comprise bank deposits with a residual term of more than 3 months to 1 year, as well as near money market investments that are not classified as cash and cash equivalents, such as short-term, liquid debt instruments and shares in money market funds. The capital expenditure for financial investments includes the purchase of money market funds in the first quarter of the reporting period. These were disposed in the 2nd quarter of the reporting period and recognised in the item disposal of financial investments. The balance of capital expenditure in financial investments and the disposal of financial investments amounts to €102 million, which is €593 million lower than in the previous year. This results predominately from money market funds purchased in financial year 2014/15 and disposed in the previous year.
In the reporting period, cash outflow from financing activities totalled €438 million (2015/16: cash outflow of €3,513 million). The transactions with the former METRO GROUP include payments in connection with the initial liquidity condition. In the previous year, cash flow from financing activities was primarily impacted by the redemption of borrowings.
Cash and cash equivalents were subject to restrictions on title in the amount of €33 million (2015/16: €0 million).